Course of Construction Insurance, contractors and why the WCB matters
Whether it is a commercial project, a new home build or a partial renovation on your home or dwelling a COC, or course of construction policy, is your best protection no matter how large or small the project is. For commercial projects such as a stand-alone building for office, retail, manufacturing/production workspace, a COC policy protects the building owner and contractor from significant loss.
Construction sites have many different risks compared to finished buildings as they contain large pieces of equipment, incomplete buildings that may not have all the safety features installed, and assorted construction materials. In Canada during winter months many large construction projects are without central heat so they are using portable furnaces often powered by propane and emitting flames in contained vessels. Needless to say, there are many opportunities for a loss, either by fire, wind, hail, lightning, rain, flood and theft/vandalism.
A COC policy can be obtained by any number of parties, the contractor, an engineer, a developer, or the property owner. For large-scale commercial projects the COC can cover many parties under it, such as sub-trades and independent contractors hired to do certain, specifics parts of the project as well as addressing any needs with loss-payees. With commercial projects and large values these policies are often complex and require extensive expertise to ensure no gaps in coverage. This is not the same for residential policies but there are still significant risks.
When embarking on a home renovation project of significant magnitude one should always consult their policy wordings and if unavailable, ask their insurance broker. With many different companies providing various types of home insurance policies, there are simply too many variables to ensure a consistent level of coverage can be assumed in place for anyone. The fact is that different insurance companies will require notice and potential policy changes for projects, determined by project dollar value or scope of the project. This may mean the insured needs to work with the contractor they choose for the project to assess who is responsible for insurance coverage.
There is one other aspect which is often overlooked or forgotten, the role of WCB coverage. Many people assume that when they hire someone, such as a contractor, repair person, or tradesperson that they are not obligated cover the WCB costs, this is not true. Why this relates to property insurance is that the liability coverage on a home insurance policy or course of construction policy will likely not cover and compensate for injury to paid contractors on your job site.
Checking in with the WCB Board to see if your contractor(s) are covered and in good standing can go a long way to preventing loss that most insurance policies will not cover. While a property and casualty insurance broker may seem like an ideal place to inquire about WCB and insurance this is not their role with the procurement of insurance. However, working with your broker to understand the coverages and limits of policies when embarking on a construction policy is smart due diligence and they will be able to help you navigate options, so you are ensured the best coverage possible.